What is the percentage of npv being greater than initially

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Reference no: EM132279867

Use the attached file answer the following questions. 

1. Use 2.5% as the average inflation rate and 14% as the hurdle rate, please obtain the NPV (net present value) of this sourcing project. Is this project worth doing? Why so?

2. Assuming inflows of 2028-2030 are not certain but will follow distributions below, please re-evaluate the Lorain Location. What is the percentage of NPV being greater than the initially obtained value in step 1 (not zero). (hint: set your lower threshold value to the previous NPV, see what is the percentage greater than that value.)

Year

Inflow Distribution

2028

T(50000, 120000, 180000)

2029

N(130000, 4000)

2030

U(60000, 120000)

Triangular distribution(lowest possible, most likely, highest possible value)

Normal distribution(average, standard deviation)

Uniform distribution(lowest possible, highest possible)

Submission Requirements: 

  • Please submit the work in one single Excel file.
  • For problem 1, please leave your comments beneath the NPV value.
  • Copy the spreadsheet as a new spreadsheet and start to work on question #2. Please screen capture the final result (e.g., the blue distribution dialog box), then paste within the worksheet.

Attachment:- Decision Analysis.rar

Reference no: EM132279867

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